Is the Surge in AI Stocks Similar to Dot-Com Frenzy?

The surge in stocks related to artificial intelligence (AI) has many investors concerned that the rally is similar to the dot-com technology stock bubble in the 1990s. Although most AI stocks are far from the stretched valuations of dot-com stocks in the 1990s that pushed the Nasdaq 100 Stock Index ($IUXX) (QQQ) up more than 800% in five years, investors are concerned that ever-increasing valuations may spark a bubble in AI stocks.

With investors jumping into AI stocks at any price on fears of missing out (FOMO) on the rally, some analysts are concerned it could end badly.  Jonestrading said the similarities between the dot-com bubble of the 1990s and today’s AI stock surge are undeniable.  While it is still early in the investing cycle for AI stocks, they are keeping a close eye on valuations as FOMO can quickly send the stocks into “fantasy” territory.